Question

Which of the following would not increase in response to a decrease in the price of...

Which of the following would not increase in response to a decrease in the price of ironing boards?

A)The quantity of irons demanded at each possible price of irons

B)The equilibrium quantity of irons

C)The equilibrium price of irons

D)The quantity of irons supplied at each possible price of irons

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Answer #1

The iron is an input in the manufacture of ironing boards. When the price of ironing boards falls there will be an increase in the quantity demanded of ironing boards at each possible price of ironing boards. This increased demand for ironing boards will shift the demand curve of irons to the right. Thus the equilibrium quantity of iron increase. The increased demand for iron increase the equilibrium price of iron. With every increase in price, the quantity supplied of iron at each possible price increases. Since there is a rightward shift in demand curve the quantity of iron demanded at each possible price does not increase. The reason is that the increase in demand of iron is caused by non price factors.

Answer: A. The quantity of irons demanded at each possible price of irons.

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